Worldwide shipments of handhelds grew in the third quarter, bucking a recent trend, but total shipments for the year are expected to finish well below 2002 levels, according to a research report from IDC.

Worldwide device shipments grew 1.1 percent, to 2.37 million units, in the third quarter compared with the same period a year ago. In the top three spots, Hewlett-Packard moved further ahead of Sony Electronics and crept up on Palm, the No. 1 handheld maker.

However, following declines of 21 percent in the first quarter of the year and 10.7 percent in the second quarter, the market is expected to have an overall worldwide decline of about 25 percent in 2003 compared with 2002, according to IDC.

"Holiday demand really has to kick in for the numbers to change, but the one positive is that there are a lot of new devices coming into the market at lower price points, and some with wireless capabilities, making them more appealing to businesses," IDC analyst David Linsalata said.

Last year, Palm's $99 Zire turned out to be a welcome stocking stuffer for Palm as it became the fastest-growing handheld in the company's history. The company has a new $99 Zire device, the Zire 21, and is hoping history will repeat itself this holiday season.

Palm retained the top market share position but saw its lead decrease from 41.8 percent in the second quarter to 35.6 percent in the third. The Milpitas, Calif.-based company shipped about 843,000 devices, according to IDC.

HP's share jumped from 17.6 percent in the second quarter to 24.5 percent in the third as it shipped about 581,000 units. Sony was third with 11.5 percent, or about 273,000 units. Dell was fourth with 5.7 percent, about 136,000 units, and Toshiba was fifth with 3.6 percent of the market, shipping about 86,000 units.